The Internet versions of the form and instruction have been revised. These revisions are due to the California Court of Appeal ruling that found the R&TC Section 24402 deduction unconstitutional, the form and instructions have been revised to reflect the court decision rules. These changes may increase or decrease the corporate tax liabilities.

Schedule H (100S), Page 27, shading of all of Part II and Part III

Instructions for Schedule H (100S) Page 28, What's New

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Rename to What's Changed

Instructions for Schedule H (100S) Page 28, column 1, 1st paragraph

It should read:

Forms, Schedules, and instructions impacted by the court decision in Farmer Bros. Co. v. Franchise Tax Board (2003) have been revised to disallow any deduction taken based on R&TC Section 24402. In Farmer Bros. Col. V. Franchise Tax Board (2003) 108 Cal App 4th, 134 Cal Rptr. 2nd 390, the California Court of Appeal found that the R&TC Section 24402 deductible dividend provision discriminated against interstate commerce in violation of the Commerce Clause of the United States Constitution. R&TC Section 24402 provided for a deduction to the extent that the dividend payer was taxable in California. A statute that is held to be unconstitutional is invalid and unenforceable. Therefore, the deduction is not available.

Schedule H (100S) Instructions, Page 28, Part II and Part III, are deleted in full..